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Hire Employees in Spain

Spain is a prime destination for a Europe-based workforce: It has a strong education system, reliable business infrastructure, and a large, diverse economy. Additionally, flexible labor laws and business investment incentives make it a good European base for international businesses.
However, when hiring in Spain it is important to consider how the Spanish working culture, employee benefits and workplace protections will impact employees, and your business.

Spain: Business Environment

Business outlook

According to the European Commission, Spain’s economy shrank by 10.8% in 2020 due to the pandemic, but recovered well in 2021 to grow 5.1%, and modest growth is forecast for 2022 and 2023. This reflects the economic trends seen across other developed countries around the world.

Business regulation

Spain has relatively strong labor laws protecting employees, so it’s important to understand your obligations as an employer before hiring. The main labor laws relate to things like mandatory parental leave, sick leave, termination notice periods and severance, working hours, and so on. For more information, take a look at our Spain PEO page for more details on Spanish labor laws.

Business culture

Spain’s business culture, along with its culture in general, has undergone significant change in the last few decades. During this time, the country saw a huge influx of foreign tourists. With more than 80 million tourists each year, it is now the second-most visited country in the world, and it is also a hugely popular destination for expats. This has brought in money, the English language, and foreign culture, causing many parts of Spain to adopt various elements of the cultures of its Northern European neighbors.

This being said, Spain still retains a relatively relaxed business culture overall, with a more laid-back culture and fewer formalities than most other European countries. The focus is often more on building personal relationships and rapport than you may be used to, and strict punctuality is usually not viewed as being as important as it would be in many other countries, even in a business context. However, initial business interactions are usually quite formal, and this is even reflected in the Spanish language itself (using usted instead of tú in formal situations).

Recruiting employees in Spain

Recruiting employees in Spain

In Spain, as in most other countries, people generally search for jobs online. There are a number of popular job websites, including Indeed, Bolsa de Trabajo, and Monster. Social media platforms such as Facebook and LinkedIn are also popular. Posting your jobs on any of these sites is a great way to find candidates. To simplify the process further, you can hire a global PEO such as Horizons to work with you and find the perfect candidate for the job.

Interviewing employees in Spain

In-person interviews are standard and expected in Spain. Online interviews are becoming increasingly popular, so either option is acceptable. One-on-one interviews are most common, but panel interviews are not unheard of. Candidates will generally expect a typical interview situation with the usual formalities such as handshakes, business dress code, and so on.

Most important recruitment tools in Spain

Onboarding employees in Spain

Onboarding employees in Spain

The onboarding process for new employees in Spain will vary from organization to organization. The most important thing is to be as clear as possible and include all the important legal information in a written contract.

The basics of onboarding apply, and you should set aside a period of time to communicate company policies and working culture, expectations of the role, conduct any necessary training, and offer introductions to the rest of the team. It’s also good practice to give new hires the chance to ask questions and offer feedback at one or more follow-up meetings after a few days on the job.

Best remote working tools to use in Spain

There are a variety of remote working tools available in Spain. Typically, those most often used in Spain are seen as standard across the globe: Microsoft Teams, Slack, Clickup / Monday / Jira, etc.; you should be able to easily integrate your Spain employees into whatever communication systems you are already using for your employees.

There are 8 national holidays in Spain:

DateHoliday name
Saturday, January 1, 2022New Year’s day
Thursday, January 6, 2022Epiphany
Friday, April 15, 2022Good Friday
Monday, August 15, 2022Assumption
Wednesday, October 12, 2022National Day of Spain
Tueday, November 1, 2022All Saints’ Day
Tuesday, December 6, 2022Constitution Day
Thursday, December 8, 2022Immaculate Conception

There are also several holidays for regional or autonomous communities. Depending on where your employee is located, they may be entitled to additional days. This can be reviewed by our team and a detailed local holiday schedule for your employee will be shared as your hiring project begins.

What is the typical salary increase employees in Spain expect?

Employees in Spain expect an annual salary increase of approximately 3%-10%; however, there is no set standard and the increase amount would depend on a variety of factors, including what is set out in collective bargaining agreements or what the employer offers (if above the amount required by the collective bargaining agreement). It is best to discuss this with candidates you have extended an offer to and have the annual raise amount included in the employment contract.

Special notes about work visas in Spain

There are several special notes about work visas in Spain:

  1. EU citizens do not need a work permit to work in Spain. The Right of Residence allows EU citizens to live and work in any EU country.
  2. Foreign nationals holding permanent residency in Spain (and holding a social insurance card). They are considered local nationals for the purposes of employment opportunity. As such, they do not need a work visa to work in Spain.
  3. Foreign nationals holding an EU Blue card are considered local nationals for the purposes of employment opportunity. As such, they do not need a work visa to work in Spain.
  4. For director-level positions, the minimum salary for Spain work visa success is €55,142.
  5. For other professional-level positions, the minimum salary for Spain work visa success is €40,077.
  6. UK Citizens need a work permit if they start working in Spain after Brexit.
  7. The minimum wage for expats in Spain is the same as for locals in Spain.

Valid reasons to terminate employment in Spain

There are specific situations that qualify as valid reasons for termination.
  • Business-related reason (economical, technical, or organizational cause), such as:
    • Changes in the means or instruments of production
    • Changes in the systems and working methods of the staff
  • Individual-related reason (unexpected incompetence / inability to adapt)
  • Reason validly stated in the contract (unless related to abuse)
  • Mutual agreement (with a written agreement between the employer and employee)

There are also a number of situations classed as ‘extraordinary’ reasons for dismissal. These can be divided into two categories: reasons relating to the employee, and reasons relating to the employer.

1. Reasons relating to the employer:

Just cause:

  • Substantial changes in working conditions
  • Non-payment or continuous delay in pay
  • Serious breach of obligations by employer

Frequently asked questions (FAQ):

This question is extremely personal and based on your exact situation, risk tolerance, and the type of work you need to have done.

Hiring freelancers in Spain does come with certain risks, including risk of employee misclassification if the freelancer is determined to be, in fact, and employee. 

In general, we would recommend to have international and Spanish tax professionals assess your situation and advise you on whether you should hire a Spanish freelancer or a Spanish employee. In most cases, hiring an employee will come with the least risk, but it would also require specialized knowledge of Spanish employment law. Hiring your employee with Horizons would fulfil that requirement and allow you to hire employees in Spain with ease.

Yes, it is fully possible to hire foreign employees in Spain. You should note that the foreign employee in Spain would not be able to begin work until the Spanish immigration employees have approved the employee’s work permit.

Opening a subsidiary in Spain is a lengthy and laborious process. It can take more than two months to complete and is considered an overall difficult process.

If you want to open a subsidiary in Spain, it would require:

  • Registration with the Spanish Commercial Registry
  • A tax identification number
  • A corporate bank account in Spain containing the required capital to fund the start-up of the business
  • A “Certificate of Denomination” issued by the Spanish Commercial Registry
  • A “deed of incorporation” notarized in cooperation with the Spanish Public Notary
  • A completed copy of form D1-A (declaration of foreign investments) submitted to the Registry of Directorate General for Trade and Investments

Opening a branch office is less complicated, but still requires a significant amount of paperwork and local knowledge of Spain. The documents required to open a branch office in Spain include:

  • A certificate proving incorporation of the parent company
  • A certificate proving that the parent company is in good standing
  • The parent company’s articles of association and memorandum
  • A power of attorney that has been legally notarized
  • A Spanish tax identification number
  • A proper residency certificate obtained by the branch office representative
  • A Digital Certificate
  • Inscription on the corresponding Commercial Registry

In most cases, the fastest and safest way (from a compliance perspective) to get operations started in Spain is to hire your first several employees with a global EOR like Horizons.

The process of hiring employees in Spain can be straightforward. If you have already identified a candidate, you can contact us for a free consultation and detailed description of how we can hire your Spanish team in the next 48 hours.

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